EPA's CO2 reduction proposal could be positive for biomass energy

The U.S. EPA is taking action to reduce carbon dioxide (CO2) emissions from existing power plants. On June 2, the agency published a proposed rule that aims to reduce carbon emissions by 30 percent in 2030, when compared to 2005 emissions. With regard to biomass, the proposal specifically recognizes “that biomass-derived fuels can play an important role in CO2 emission reduction strategies.”

The proposal, titled the Clean Power Plan, will be implemented through a state-federal partnership that is designed to provide each state with flexibility in meeting its specific goal. Under the partnership, states will identify a path forward using either current or new electricity produced and pollution control policies. The proposal provides guidelines for states to develop plans to meet state-specific goals set by EPA. “States can choose the right mix of generation using diverse fuels, energy efficiency and demand-side management to meet the goals and their own needs. It allows them to work alone to develop individual plans or to work together with other states to develop multi-state plans,” said the EPA in a statement.

“This plan is all about flexibility,” said EPA Administrator Gina McCarthy. “That’s what makes it ambitious, but achievable. That’s how we can keep our energy affordable and reliable. The glue that holds this plan together, and the key to making it work, is that each state’s goal is tailored to its own circumstances, and states have the flexibility to reach their goal in whatever way works best for them.”

In setting state-specific goals, the EPA said it analyzed the practical and affordable strategies that states and utilities are already using to lower carbon pollution from the power sector, including energy efficiency improvements, the improvement of power plant operations, and encouraging a reliance on low-carbon energy.

According to the EPA, the basic formula for each state goal is a rate that takes CO2 emissions from fossil fuel-fired power plants in pounds and divides that number by state electricity generation from fossil fuel-fired plants and certain low- or zero-emitting power sources in megawatt hours. The EPA explained that this approach factors in megawatt hours from fossil fuel power plants and other types of power generation, such as renewables, nuclear and megawatt-hour savings from energy efficiency in the state. The goal for each state is different because each state has a unique mix of emissions and power sources.

The EPA has stressed that the state goals are not requirements on individual electrical generating units. Rather, the agency said that each state has broad flexibility to meet the rate by 2030 by lowering the overall carbon intensity of the power sector in the state. In a fact sheet, the EPA has described some of the measures states can choose to rely on in the plans. These measures include, but are not limited to, demand-side energy efficiency programs, renewable energy standards, efficiency improvements at plants, co-firing or switching to natural gas, transmission efficiency improvements, energy storage technology, retirements, expanding renewables or nuclear, market-based trading programs and energy conservation programs.

States are required to submit initial or complete plans by June 30, 2016. The proposed rule includes an option to use a two-step process for submitting final plans if more time is needed. Documentation provided by the EPA explains that additional time may be needed to complete the plans due to the timing of legislative approval processes and complexities associated with regional approaches. Individual states plans would be eligible for a one-year extension to June 30, 2017. Multi-state plans would be eligible for a two-year extension to June 30, 2018, but would be required to submit a progress report by June 30, 2017. Under the proposal states would also have a flexible timeline—up to fifteen years after the Clean Power Plan is final —for all emission reduction measures to be fully implemented in 2030.

The proposed rule makes several specific references to biomass. It notes that sustainable forestry and agriculture can improve resiliency to climate change, be part of a national strategy to reduce dependence on fossil fuels, and contribute to climate change mitigation by acting as a “sink” for carbon. “The plant growth associated with producing many of the biomass-derived fuels can, to varying degrees for different biomass feedstocks, sequester carbon from the atmosphere. For example, America’s forests currently play a critical role in addressing carbon pollution, removing nearly 12 percent of total U.S. greenhouse gas emissions each year. As a result, broadly speaking, burning biomass-derived fuels for energy recovery can yield climate benefits as compared to burning conventional fossil fuels,” said the EPA in the proposed rule. “Many states have recognized the importance of forests and other lands for climate resilience and mitigation and have developed a variety of different sustainable forestry policies, renewable energy incentives and standards and greenhouse gas accounting procedures. Because of the positive attributes of certain biomass-derived fuels, the EPA also recognizes that biomass-derived fuels can play an important role in CO2 emission reduction strategies. We anticipate that states likely will consider biomass-derived fuels in energy production as a way to mitigate the CO2 emissions attributed to the energy sector and include them as part of their plans to meet the emission reduction requirements of this rule and we think it is important to define a clear path for states to do so.”

Within the rule, the EPA also referenced its draft accounting framework for biogenic carbon emissions. According to the EPA, the biogenic CO2 accounting framework is expected to provide important information regarding the scientific basis for assessing biomass-derived fuels and their net atmospheric contribution of CO2 related to the growth, harvest and use. “This information should assist both states and the EPA in assessing the impact of the use of biomass fuels in reaching emission reduction goals in the energy sector under state plans to comply with the requirements in the emission guidelines.” McCarthy has previously indicated the framework could be complete by the end of the year.

In addition to reducing carbon pollution, the proposed rule is also expected to reduce particle pollution, nitrogen oxide emissions and sulfur dioxide emissions by more than 25 percent. The EPA estimates the proposal will lead to health and climate benefits worth $55 billion to $93 billion per year in 2030, a value that far outweighs the estimated $7.3 billion to $8.8 billion in costs.

The Biomass Power Association has weighed on the EPA’s proposal. “Biomass Power Association commends the Obama Administration for its strong commitment to reducing carbon emissions from existing power plants, specifically citing biomass as a carbon emission reduction strategy,” said Bob Cleaves, president and CEO of the BPA. “The execution of the Administration’s rules released this morning will make renewable energy sources, including biomass, an even more significant part of our nation’s energy mix.”

“The rules issued today echo the findings of the National Climate Assessment (NCA) released by the White House last month in recognizing the climate benefits offered by biomass when compared to conventional fossil fuels. This is the first step toward realizing the full potential for bioenergy in addressing climate change. The NCA estimated energy from biogenic sources could displace up to 30 percent of the nation’s current U.S. petroleum consumption, while improving forest health,” Cleaves continued.

Cleaves also noted that the EPA’s pending biogenic carbon framework will have significant implications for the biomass industry. “This is an exciting time for renewable energy, especially the biomass industry. However, there is still some uncertainty surrounding the carbon accounting of biomass as we await the decision by EPA on how to regulate biomass under the Clean Air Act due out later this summer. This decision will have an enormous impact on the ability of biomass power to contribute to the nation’s clean air goals. Given the ambitious goals outlined this morning, Biomass Power Association hopes the nation will be able to take full advantage of the environmental and economic benefits offered by fully embracing biomass power,” he said.

The Biotechnology Industry Organization stressed that the EPA should recognize that carbon emissions from renewable biomass are fundamentally different from those of fossil fuels, and that the biotechnology can and must play a key role in mitigating fossil carbon emissions. “EPA is missing an opportunity to give industry clear guidance that using sustainable biomass in energy generation mitigates greenhouse gas emissions by recycling atmospheric carbon,” said Brent Erickson, executive vice president of BIO’s Industrial & Environmental Section. “This is fundamentally different from the use of fossil resources that continuously add carbon to the atmosphere. Industrial biotechnology also provides tools – such as biological conversion of CO2 to fuels, chemicals and products - that can reuse waste CO2 emissions, and these tools should also be incorporated as a viable compliance option to reduce GHG emissions.”

The Algae Biomass Organization also addressed the beneficial reuse of CO2 emissions in its response to the EPA’s announcement. “The saying ‘if all you have is a hammer, everything looks like a nail’ is an appropriate metaphor for the approach to CO2 emissions reductions recently,” said the ABO in a statement. “The ‘nail’ of CO2 emissions, it is believed, can only be addressed by the ‘hammer’ of regulations to bury, sequester or otherwise get rid of the waste.A new crop of algae technologies can flip this approach on its head by converting CO2 into valuable commodities for trillion dollar industries, thus turning a problem – the high cost of compliance – into an opportunity – an ongoing revenue stream.”

The ABO noted that algae production facilities can be collocated at power plants and other facilities, allowing those facilities to be customers for waste CO2. “By monetizing waste CO2 emissions, energy companies can, at minimum, offset the cost of compliance with regulations and thus avoid ratepayer impact. Depending on the size of the power plant, some could create an annual revenue stream that returns a profit. In either case, the CO2 will be producing commodities that create jobs at the plant and downstream, helping to create economic development in their communities and elsewhere,” said the ABO.

The EPA stopped short of considering carbon capture and utilization (CCU) as an approved strategy in its new rule. The ABO, however, said it will continue its efforts to try to get CCU qualified as an approved mitigation strategy. “Including utilization in this proposed rule will ensure that the new regulations accelerate the adoption of CCU technologies, like algae. Furthermore, we look forward to being a resource for EGU's to help them comply with the proposed rule,” the ABO continued. “Beneficial utilization of CO2 is the only option to turn the market forces and economics of waste CO2 into a ROI-driven, growth industry that will turn a huge problem into an economic opportunity. In doing so, we can achieve a rare trifecta – the reduction of emissions, the creation of jobs and economic development across the country, and a contribution to our food and energy security.”

A 120-day comment period will open on the proposal following its publication in the Federal Register. The EPA has also announced it will hold four public hearings on the proposed plan during the week of July 28 in Denver, Atlanta, Washington, D.C., and Pittsburgh. Additional information on the Clean Power Plan, a full copy of the proposed rule and several factsheets on the program are available on the EPA’s Carbon Pollution Standards website.

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